Composition of Commissioners and Directors, Profitability, Capital Structure and Investor Investment Decisions: Role of Sustainable Investment

Abstract

This study aims to determine the role of the sustainable investment on the composition of commissioners and directors, profitability, capital structure and investor investment decisions in financial sector companies listed on the Indonesia Stock Exchange. The research data were obtained from 2015-2018 by annual reports, financial reports, sustainability reports, summaries of tradable shares volume, and summaries of listed shares of financial sector companies listed on the Indonesia Stock Exchange (IDX). 48 units of observation data were collected. This study used quantitative analysis techniques with Structural Equation Modeling (SEM) and was processed by SmartPLS 3. The test results showed: 1) investor investment decisions are negatively and significantly affected by composition of commissioners and directors; 2) investor investment decisions are not affected by profitability; 3) investor investment decisions are positively and significantly affected by capital structure; 4) sustainable investment is positively and significantly affected by the composition of commissioners and directors; 5) sustainable investment is positively and significantly affected by profitability; 6) sustainable investment is not affected by capital structure; 7) investor investment decisions are positively and significantly affected by sustainable investment. Therefore, the sustainable investment mediation effect of the composition of commissioners and directors on investor investment decisions is quasi-mediating. It is also proven that there is fully meditating on the effect of profitability on investor investment decisions. While the effect of capital structure on investor investment decisions is not proven to mediate. Keywords: composition of commissioners and directors, profitability, capital structure, sustainable investment, investor investment decision